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    Categories: Case StudiesLaura

BP has a Brand Problem




They talked
the talk but never walked the walk.


   

    No
industry is more loathed and distrusted than big oil. But while people may hate
the industry, oil is a necessary evil that our society depends on. Like it or
not, oil companies aren’t going anywhere.

   

    Like
many companies in unpopular industries, BP launched a massive advertising
campaign to put a little lipstick on the oil pig. Advertising is not very good
at changing strongly-held perceptions, but in BP’s case it actually worked.


    Too
well, in fact. Its “Beyond Petroleum” campaign was able to move the BP brand
from the bottom of the barrel to one that was perceived by consumers as one of
the greenest petroleum companies in the world. Actually, BP was at the top of a
list of companies that had become greener in the previous five years.

  

    But the
“holier than thou” tone of BP’s advertising placed the company on a perilously
high green pedestal it was sure to fall from.


   

    A
little history might be in order. BP traces its beginnings back to English
adventurer William D’Arcy. Bankrolled by Burmah Oil, D’Arcy’s firm in 1908 was
the first company to strike oil in the Middle East.


    The following
year, the two companies formed Anglo-Persian Oil and in 1914 the British
government took a 51% stake. In 1954, Anglo-Persian changed its name to British
Petroleum, the name used on its popular gasoline stations in Britain and across
continental Europe.


   

    British
Petroleum merged with Amoco in 1998, and changed its name to BP Amoco. Then two
years later, after ARCO, Castrol and a few more companies were added, the
company dropped “Amoco” and became just “BP.”

   

    In a
press release announcing the change, the company justified keeping the BP name
because of its recognition around the world and because it stood for the new
company’s aspirations: “Better People, Better Products, Big Picture, Beyond Petroleum.”


    In
2000, a rebranding effort was unveiled. It included a new green-and-yellow
sunburst logo and a new slogan “Beyond Petroleum.” Launched with a massive $200
million advertising and public relations program, BP was talking the talk of a
new, more environmentally-friendly energy company.


   

    Unfortunately,
BP never walked the walk. Ten years later, BP is still the big oil company it
has always been. In the first quarter of this year, BP revenues were $73 billion,
only $700 million (less than 2%) were from alternative energy. So much for
moving beyond petroleum.


   

    The
fact that BP is still an oil company isn’t what hurts the brand. What hurts the
brand is that BP is an oil company with a terrible reputation for safety. Known
for cutting costs on safety and maintenance to increase profits, the company has
suffered several disasters over the past few years. (The spill in the Gulf was just
the latest and the largest.)



    ·    In
2005, an explosion at BP’s Texas City refinery killed 15 workers and injured
170 others.

    ·    In
2006, 267,000 gallons of crude oil leaked from an Alaskan pipeline maintained
by PB. Later that year, another BP Alaskan pipeline suffered a catastrophic
split which led to a temporary closure of Alaska’s entire oil supply. “Severe
corrosion” caused by cost-cutting and lack of maintenance on BP’s part was
blamed for the split.

    
·   Numerous
safety and environmental violations from these events and others forced BP to
pay $485 million in fines in the United States alone in the past five years.


   

    To a
company that posted $5.65 billion in profit in the first quarter, the fines are minuscule But the enormous profits show just how greedy and callous management
is for not running a safe and ethical company. How could management watch reels
of its television commercials knowing all too well it was failing to deliver on
its promises?


    The
spill in the Gulf has pulled the curtain off of a company that has been blowing
smoke up our butts for years. No consumer, regulator or politician will soon
forget this tragedy.


    Producing
oil is an dirty and dangerous business. Pretending it’s not makes disasters
like this all the worse. And make no mistake, these disasters are not easily
forgotten.



    Consider
Exxon-Mobil, the world’s largest private oil company. Its methods of operations
are today considered the gold standard in the production of oil. Yet, Exxon
still remain cursed by the images of oily seabirds from the Exxon-Valdez
disaster 21 years ago.


   

    Strong
brands with a reputation for quality, safety and honesty are able to survive
even the worst tragedies and negative PR stories. Toyota, Tylenol and Goldman
Sachs have faced some dark days recently, but for them the future is still
bright because the brands are strong.

   

    For BP,
not so much. A brand with a poor reputation facing one of the worst oil spills
ever is damaged goods. No amount of advertising can fix this. Anything BP says will
no longer be believed. You can fool us once, but never again.

Laura Ries :

View Comments (18)

  • A Brand Problem....to start with. Given the magnitude of the catastrophe -that dwarfens any other known oil spill in history- , I am not so sure if the quick ( and seemingly honest )reaction of the CEO is going to be enough to cure the scars.
    We may be seeing pictures of seagulls, dolphins and marine life coated with tar for a long time in the (just till now) pristine waterways of the Gulf.
    Brand is not just a beautifuly designed logo and a enlightening corporate vision. Brand is about how your stakeholders -in this case the whole world- perceive you... and so far this perception is a mess out of control. I do not think EXXON ever recovered from the Exxon Valdez runaground in Alaska (++ 20 years ago) ... in a time without Internet, twitter and socialMedia -where companies still had the ilusion of controling the public opinion- ; Yes.... BP now is sinonym of BrandProblem

  • nice article.people used to consider the brand of the products,but Branding is not just about paint on the outside of a product. A brand is what your company stands for in the mind. And if that is damaged the future of the company could be in jeopardy.

  • Agreed. No amount of advertising can fix this. Just waste money. Unless BP not only talks the talk but also walks the walk. I believe that many people are expecting BP to make a CHANGE.

  • Excellent article on the situation and one in which I agree completely. Branding doesn't replace doing the right thing. I blogged about this exact topic yesterday, with very similar thoughts as yours.

  • Brand is not just a beautifuly designed logo and a enlightening corporate vision. Brand is about how your stakeholders -in this case the whole world- perceive you... and so far this perception is a mess out of control.

  • This is a nice article. BP does not only have the mobile problem but it has loads of problems that made our environment worst. I know we all need oil, we live in it and also we can die in it.

  • Thank you for an enlightening article on brand vs image. Some excellent commentary as well.

  • Excellent post. BP used to be one of my favorite brand identities, but now the thought or mention of them makes for mixed emotions.
    From a branding perspective, I wonder how they hope to recover in terms of brand reputation management.
    The interesting thing about BP as a brand is, when we use their product (unless at the pump) it isn't branded, so we don't always have an option to consciously boycott it if we chose to.
    Also, unlike firestone, toyota or others which have had pr nightmares in recent years, this is a product that is more of near necessity than choice.
    I wonder if we'll later see a rebranding like phillip morris/altria in hopes of shedding negativity.

  • BP may be able to save itself somewhat if it uses a green solution to clean up the oil spill. One such solution that I like is Adria Brown's patented Golden Retriever product made from dried corn cobs. Apparently she has contacted BP and many people and agencies and is simply waiting to hear from them. Her latest press release and other links can be found at this webpage http://recovery.windenberger.com/